Abu Dhabi National Energy Co (Taqa) yesterday said it had agreed with partners to invest 800 million Euros (Dh4 billion) to jointly develop a gas storage project in the Netherlands with Russia's Gazprom.
Set to be Europe's biggest gas storage facility offering third party access, the project will be of major strategic and commercial value for both the Netherlands and its operators.
Construction in a depleted gas reservoir north of Amsterdam will start after all necessary permits have been granted, which Taqa said it expected to receive in 2010. It is aiming for commercial operations to begin in 2013.
"This is a substantial milestone and represents Taqa's commitment to this flagship project," said Paul van Gelder, Managing Director of Taqa in the Netherlands.
Taqa is working on the Bergermeer project with a consortium that includes developers Dyas, Energie Beheer Nederland (EBN) and Petro-Canada.
As its own gas resources decline, the Dutch government aims to strengthen the Netherlands' position as a gas hub in Europe by developing projects such as storage to help bolster its negotiating power with large energy exporters by accommodating seasonal fluctuations in supply and demand.
Gazprom will provide cushion gas for the project, which is necessary to ensure the reservoir has optimal pressure to start storage activities, in exchange for working capacity and a participating interest in the operations of the facility.
The site will have a working volume of around four billion cubic metres (bcm) of which more than two bcm will be made available to third parties, a spokesman for Taqa said.
The final investment decision follows a memorandum of understanding between the companies signed in December last year.
Taqa, which is to operate the facility, has a 36 per cent stake in the project, while Dyas and Petro-Canada each have 12 per cent. Dutch state energy project developer EBN has a 40 per cent interest.
Sources told Reuters in September that Dyas and Petro-Canada may be looking to sell their stakes in the project.
Dutch gas resources, including mainland Europe's biggest gas field near Groningen, have contributed about 200 billion Euros to state income since about 1970, but annual income from gas is set to shrink in coming years as resources dry up.
Taqa is also expanding its oil and gas exploration and production activities in the North Sea region, and announced it would buy the energy unit of Dutch chemicals group DSM in July this year. – Gulf News
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